States should take control of our outmoded public land system

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Robert Nelson is in the process of writing a policy paper for the Property and Environmental Research Center for a forthcoming edited book collection celebrating the centennial of the foundation of the National Park Service in 1916.

Late last month the Senate passed a non-binding budget resolution that encourages the selling or transfer of federal lands to state and local governments. With a Republican Congress, the longstanding question over federal management of public lands is resurfacing once again with renewed urgency.

The federal government owns large parts of the forests, deserts and other rural areas of the American West – in total around half of all the land in the Rocky Mountain and Pacific Coast states. Roughly 30% of federal lands are made up of wilderness and national parks, while the rest are used for timber harvesting, grazing, energy leasing and recreation.

This pervasive federal presence is a product of policies championed at the turn of the 20th century.

Throughout the nineteenth century, however, the government aggressively disposed of its land holdings to private landowners and state governments, seeking to advance economic development and the pursuit of “manifest destiny.” It was in the period from 1890 to 1920 that American Progressives successfully argued that these lands would be more expertly managed in federal hands.

After more than 100 years of experience, we now know otherwise, that these lands would be better under state or private management. It’s a lesson I learned well during almost two decades at the Department of the Interior working as a policy analyst in the Office of the Secretary.

Instead of much greater efficiency, the research conducted by myself and others has shown that federal management turned out to be wasteful – typical of many government-owned enterprises around the world over the course of the 20th century – as well as detrimental to the land itself.

High costs, poor return

Federal “multiple-use” lands (excluding national parks and other special use lands) averaged US$7.2 billion in costs per year from 2009 to 2013, according to a recent report from the Property and Environmental Research Center (PERC), a non-profit think tank that seeks market solutions to environmental problems. At the same time they brought in just $5.3 billion in revenues (mostly royalties from oil, gas and coal leases in a few energy rich states).

Over the same period, similar state-owned lands returned $14.5 for every dollar spent on management while achieving comparable or better land results in areas such as the use of forest and rangeland resources.

Because public land costs are such a tiny part of the immense federal budget, the issue seldom receives close scrutiny, relieving pressure on the government to manage its lands more efficiently. And since all taxpayers bear the costs, states themselves have little incentive to put pressure on federal managers to raise revenues or reduce expenses.

Layers of red tape

Even if they wanted to, it would be difficult for federal land managers to bring their expert skills to bear. Over the years, layer upon layer of requirements for environmental impact statements, land use plans and other regulatory and procedural steps have created a suffocating burden of red tape.

In 2002 in The Process Predicament, the US Forest Service begged for relief, declaring that “"unfortunately, the Forest Service operates within a statutory, regulatory and administrative framework that has kept the agency from effectively addressing rapid declines in forest health.”

Poorly managed western forests, for example, had become overstocked with large volumes of “excess fuels.” From the 1980s onwards, these dead trees and limbs increasingly erupted into large, environmentally damaging conflagrations, requiring billions of dollars to be spent annually on forest fire suppression.

Beyond the executive branch, federal courts have also gotten more involved in public land use, drastically increasing their role since the 1970s and now often dictating even local management details. For example, federal judges have blocked many specific timber sales in the West, for example, to protect biodiversity.

The wasted energy opportunity

The United States has been experiencing an energy revolution in recent years owing to new methods of extracting oil and gas from shale. Because of the cumbersome federal land bureaucracy, the lack of incentives and other constraints, however, this revolution has largely bypassed the public lands.

Thomas Merrill, a professor at Columbia law school, noted in the Case Western Reserve Law Review in 2013 that in “looking at a map of the United States where fracking activity is underway, and comparing it to a map showing areas of land and associated mineral rights that are controlled by the federal government,” one finds that “there is very little overlap” – and not due to any lack of oil and gas shale resources in the West.

None of this is news, admittedly. At public land conferences since the early 1990s, economists, political scientists, retired federal managers and other professionals have lamented the “dysfunctional” public land system. Yet, little has changed over that period. This is partly a consequence of the increasing partisanship and other dysfunctions that have afflicted many other areas of federal policy making and administration.

It is also, however, a result of the deep ambivalence felt by many Westerners about reducing the federal presence. The large flows of “wasted” federal money also represent an important economic asset for the rural West. Perhaps the truest statement ever made with respect to their attitudes towards the public lands is that westerners want the federal government to “go away and give us more money.”

Growing Western anger

The federal government, however, has not gone away. With the level of Western frustration growing, and the federal government increasingly strapped for funds to send to the West, pressure for change has mounted in recent years. Western states are now threatened, for example, with the designation of the sage grouse as an endangered species, an action that would put many millions of acres of Western rangeland under tight federal control.

In 2014, Utah conducted a comprehensive study of the implications of transferring ordinary public lands and their federal management costs and revenues to the state. The study showed that if Utah had replicated federal management practices in 2013, the state would have incurred $117 million in net additional costs.

Projecting these results across the full West, the fiscal benefits to the federal government could exceed $1 billion per year for transferring ordinary public lands – predominantly used for timber harvesting, livestock grazing, and hiking, hunting, fishing and other state and local recreational use, along with highly profitable energy leasing – to state ownership. National parks, wilderness areas and the other most valuable nationally owned lands would remain in federal hands.

Western states need to decide: do they want the federal government to go away or do they want the federal money?

If the West were to decide to assume greater control of its lands, states would not only be able to improve the quality of management but also do it at much lower costs and earn much higher net revenues than the federal government.

This would be possible in part because they would be free of federal judicial micro-management and the many rules and regulatory entanglements that have made effective federal management of the public lands so difficult for more than 20 years.

It’s time the US turned the page on the era of federal ownership of public lands and resumed transferring land to the states in order to raise more revenue and improve its management.

This article has been updated to correct the first name of a Columbia University professor cited in the story. It’s Thomas Merrill, not Charles.